Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 2.9AP
To determine
Concept Introduction:
Income Statement is a statement which records all the revenues and expenses of the company. In income statement, company calculates profit or loss by matching the income and expenses and computing their difference.
To explain: Performance of current year is better than previous year.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
This problem is based on the 2017 annual report of Campbell Soup Company. Answer the following questions. Refer to the Selected Financial Data for parts (a) to (d).Required:
Find the net sales in 2014. (Enter your answer in millions.)
Calculate the operating income (earnings before interest and taxes) in 2013. (Enter your answer in millions.)
Calculate the difference between operating income (earnings before interest and taxes) and net income (net earnings) in 2015. (Enter your answer in millions.)
Find the year(s) in which net income (net earnings) decreased compared to the previous year.
attatched are the charts needed for the following questions, I have tried to figure these out but I come up with incorrect answers. Thank You
The financial statements for Tyler Toys, Inc. are shown in the popup window:
LOADING...
.
Calculate the profit margin, return on assets, and return on equity for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders?
Tyler Toys, Inc.
Income Statement for Years Ending December 31, 2013 and 2014
2014
2013
Revenue
$14,147,690
$13,566,481
Cost of goods sold
$-8,447,054
$-8,131,319
Selling, general, and administrative expenses
$-998,405
$-981,658
Depreciation
$-1,498,619
$-1,472,478
EBIT
$3,203,612
$2,981,026
Interest expense
$-376,184
$-355,975
Taxes
$-1,074,423
$-997,519
Net income
$1,753,005
$1,627,532
Right-click on the table and select Copy to Clipboard and then right-click the
highlighted texts in the popup dialogue box and select Copy in order to paste its…
The financial statements for Tyler Toys, Inc. are shown in the popup window:
LOADING...
.
Calculate the profit margin, return on assets, and return on equity for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders?
Tyler Toys, Inc.
Income Statement for Years Ending December 31, 2013 and 2014
2014
2013
Revenue
$14,146,094
$13,567,551
Cost of goods sold
$-8,448,688
$-8,131,338
Selling, general, and administrative expenses
$-998,878
$-980,620
Depreciation
$-1,497,580
$-1,472,740
EBIT
$3,200,948
$2,982,853
Interest expense
$-376,634
$-354,060
Taxes
$-1,073,239
$-998,941
Net income
$1,751,075
$1,629,852
Right-click on the table and select Copy to Clipboard and then right-click the
highlighted texts in the popup dialogue box and select Copy in order to paste its…
Chapter 2 Solutions
Financial Accounting: The Impact on Decision Makers
Ch. 2 - Read each definition below and write the number of...Ch. 2 - Prob. 2.1ECh. 2 - The Operating Cycle Two Wheeler Cycle Shop buys...Ch. 2 - Classification of Financial Statement Items Regal...Ch. 2 - Current Ratio Baldwin Corp. reported the following...Ch. 2 - Classification of Assets and Liabilities Indicate...Ch. 2 - Selling Expenses and General and Administrative...Ch. 2 - Prob. 2.7ECh. 2 - Income Statement Ratio The income statement of...Ch. 2 - Statement of Retained Earnings Landon Corporation...
Ch. 2 - Components of the Statement of Cash Flows Identify...Ch. 2 - Prob. 2.11ECh. 2 - Prob. 2.12MCECh. 2 - Prob. 2.13MCECh. 2 - Prob. 2.14MCECh. 2 - Materiality Joseph Knapp, a newly hired accountant...Ch. 2 - Costs and Expenses The following costs are...Ch. 2 - Prob. 2.3PCh. 2 - Prob. 2.4PCh. 2 - Working Capital and Current Ratio The balance...Ch. 2 - Single-Step Income Statement The following income...Ch. 2 - Multiple-Step Income Statement and Profit Margin...Ch. 2 - Statement of Cash Flows Colorado Corporation was...Ch. 2 - Basic Elements of Financial Reports Comparative...Ch. 2 - Prob. 2.10MCPCh. 2 - Prob. 2.11MCPCh. 2 - Prob. 2.12MCPCh. 2 - Prob. 2.1APCh. 2 - Prob. 2.2APCh. 2 - Prob. 2.3APCh. 2 - Prob. 2.4APCh. 2 - Working Capital and Current Ratio The balance...Ch. 2 - Single-Step Income Statement The following income...Ch. 2 - Prob. 2.7APCh. 2 - Prob. 2.8APCh. 2 - Prob. 2.9APCh. 2 - Comparability and Consistency in Income Statements...Ch. 2 - Prob. 2.12AMCPCh. 2 - Prob. 2.1DCCh. 2 - Prob. 2.2DCCh. 2 - Analysis of Cash Flow for a Small Business...Ch. 2 - Prob. 2.4DCCh. 2 - The Expenditure Approval Process Roberto is the...Ch. 2 - Prob. 2.6DC
Knowledge Booster
Similar questions
- Basic Elements of Financial Reports Comparative income statements for Grammar Inc. are as follows: Required The president and management believe that the company performed better in 2016 than it did in 2015. Write the presidents letter to be included in the 2016 annual report. Explain why the company is financially sound and why shareholders should not be alarmed by the $20,000 loss in a year when operating revenues increased significantly.arrow_forwardFinancial statement data for years ending December 31 for Latchkey Company follows: a. Determine the ratio of sales to assets for 2016 and 2015. b. Does the change in the ratio of sales to assets from 2015 to 2016 indicate a favorable or an unfavorable trend?arrow_forwardComment on the changes between these two years. How do the changes in profit margin between 2017 and 2016 reflect changes in expense (cost) control and, other things equal, shareholder valuearrow_forward
- Comment on the changes between these two years. More specifically, how do the changes in Days Sales Outstanding figures between 2017 and 2016 reflect changes in collection experience and, other things equal, shareholder valuearrow_forward(Disclosure of Estimates) Nancy Tercek, the financial vice president, and Margaret Lilly, the controller, of Romine Manufacturing Company are reviewing the financial ratios of the company for the years 2017 and 2018. The financial vice president notes that the profit margin on sales ratio has increased from 6% to 12%, a hefty gain for the 2-year period. Tercek is in the process of issuing a media release that emphasizes the efficiency of Romine Manufacturing in controlling cost. Margaret Lilly knows that the difference in ratios is due primarily to an earlier company decision to reduce the estimates of warranty and bad debt expense for 2018. The controller, not sure of her supervisor’s motives, hesitates to suggest to Tercek that the company’s improvement is unrelated to efficiency in controlling cost. To complicate matters, the media release is scheduledin a few days.Instructions(a) What, if any, is the ethical dilemma in this situation?(b) Should Lilly, the controller, remain silent?…arrow_forwardYou are the management accountant of AISHA Company Ltd. MARIAM Limited is a major competitor in the same industry and it has been operating for 20 years. Summary of MARIAM Limited's statements of profit or loss and financial position for the previous three years are given below. SUMMARISED STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DEC. 2016 2017 2018 GHSm GHSm GHSm Revenue 840 981 913 Cost of sales 554 645 590 286 336 323 Gross profit Selling, distribution and admin. expenses 186 214 219 Profit before interest 100 122 104 Interest 6 15 19 Profit before taxation 94 107 85 Taxation 45 52 45 Profit after taxation 49 55 40 Dividends 24 24 24 SUMMARISED STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2016 2007 2008 GHSm GHSm GHSm ASSETSASSETS Non-current assets: 36 40 48 Intangible assets Tangible assets at net book value 176 206 216 212 246 264 Current assets: Inventories 237 303 294 Receivables 105 141 160 4 Bank 52 58 52 606 748 770 EQUITY AND LIABILITIES 2016 2017 2018 100…arrow_forward
- Complete a margin analysis for Associated Industries and answer the questions below. Associated Industries Year Ending Year Ending Change 2016 2017 Gross Margin 43.7% 43.7% 0% Operating Margin 3.9% 3.0% (.9%) Net Margin 3.0% 2.4% (.6%) 1. What was the change to the Operating Margin and what does that indicate for the operation of the business?arrow_forwardDetermine Profit Margin,Asset Turnover,Earnings Per Share,Price-Earning Ratios, Pay out ratio and Debt to asset ratio for 2016 and 2017 and explain briefly whether or not the company experiences improvement in the financial positon and operating for the period from 2016 to 2017.arrow_forwardOriole Corporation recently filed the following financial statements with the SEC. Look at the image for the balance sheet and more! Oriole CorporationIncome Statement for the FiscalYear Ended July 31, 2017 Net sales $77,630 Cost of products sold 55,218 Gross profit $22,412 Selling, general, and administrative expenses 9,893 Depreciation 1,124 Operating income (loss) $11,395 Interest expense 688 Earnings (loss) before income taxes $10,707 Income taxes 3,748 Net earnings (loss) $6,959 Use the DuPont identity to calculate the return on equity (ROE). In the process, calculate the following ratios: net profit margin, total asset turnover, equity multiplier, EBIT return on assets (EROA), and return on assets. (Do not round intermediate calculations. Round answers to 2 decimal places, e.g. 52.75 or 52.75%.) Net profit margin % Total asset turnover Equity multiplier EBIT return on assets % Return on assets %…arrow_forward
- The financial statements for Tyler Toys, Inc. are shown in the popup window: LOADING... . Calculate the current ratio, quick ratio, and cash ratio for Tyler Toys for 2013 and 2014. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders? Tyler Toys, Inc. Income Statement for Years Ending December 31, 2013 and 2014 2014 2013 Revenue $14,146,091 $13,567,817 Cost of goods sold $-8,447,104 $-8,131,461 Selling, general, andadministrative expenses $-998,668 $-981,881 Depreciation $-1,498,161 $-1,471,091 EBIT $3,202,158 $2,983,384 Interest expense $-375,459 $-354,144 Taxes $-1,074,146 $-999,111 Net income $1,752,553 $1,630,129 Right-click on the table and select Copy to Clipboard and then right-click the highlighted texts in the popup dialogue box and select Copy in order to paste its contents…arrow_forwardDuring its first four years of operation, Vaughn Co. reported the following net income. 2015 $82,800 2016 139,700 2017 166,600 2018 239,400 Vaughn is undergoing its first financial statement audit. The external auditors noted the following:1. In early 2018, Vaughn Co. changed its estimate of bad debt expense from 2.5% of sales to 2.0% of sales. The company therefore adjusted its net income upward for 2015 through 2017 by the following amounts. 2015 $1,800 2016 4,300 2017 5,700 2. The auditor discovered that ending inventory was misstated as indicated below for the years ending 2015 and 2017: Year Amount ofmisstatement Direction ofmisstatement 2015 $20,400 Overstatement 2017 $17,700 Understatement Calculate net income to be reported in Vaughn’s comparative income statements for the years 2015 to 2018.arrow_forwardIncome statements (in’000s) of Future Lifestyle and Arvind Lifestyle, the two top textile brands, are provided below. Future lifestyle profits declined in 2014-15. Although Arvind lifestyle posted loss in both periods, the loss has declined. Required: a. Examine the performance of Future Lifestyle for the two years and explain why profit has declined despite increase in revenue. b. Examine how the performance of Arvind Lifestyle for the two years and explain how Arvind lifestyle improved its performance. c. Compare the performance of the two companies for the year ending March 2015 and explain the differences in performance of the two companies. (Hint: Prepare common size income statement to analyse the cost structure of the two companies). Future Lifestyle Arvind Lifestyle March 2014 March 2015 March 2014 March 2015 INCOME Revenue 3122.86 3305.58 1764.95 2291.08 EXPENDITURE Raw Materials…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning